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Enlisted Retirement Pay

Below is the paychart which shows monthly retirement pay for active duty warrant officers who retire during 2005.

Military personnel can retire after 20 years of active duty service. A military member who retires at 20 years of service receives 50 percent of his/her monthly base pay. For each year served over 20 years, the military member receives an additional 2.5 percent, up to a maximum of 75 percent of their base pay, at 30 years of service.

Military members who entered the service after September 8, 1980, but before August 1, 1986, fall under a slightly different system that pays a little less. Instead of a direct percentage of the base pay they were receiving at the time of retirement, these members receive a percentage of their average base pay during the three years of service when their pay was the highest (which is usually, but not always their last three years of service).

On average, this equates to about 90 percent of the amounts shown on the chart below, which shows retirement pay for those who entered the service prior to September 8, 1980.

Military retirement pay is subject to federal income tax, but is not subject to social security tax. Whether or not military retirement pay is subject to state income tax varies from state-to-state, according to individual state tax laws.

For more information about the military retirement pay system, see Understanding Military Retirement Pay.

Military retirement pay is based upon grade (rank) and years of service: